RH BOPHELO LIMITED - Unaudited Condensed Consolidated Interim Half Year Results For The Six Months Ended 31 August 2018

Release Date: 16/11/2018 16:42
Code(s): RHB
 
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Unaudited Condensed Consolidated Interim Half Year Results For The Six Months Ended 31 August 2018

RH Bophelo Limited
Incorporated in the Republic of South Africa
(Registration number: 2016/533398/06)
JSE share code: RHB, ISIN: ZAE000244737
("RHB" or "the Company")

UNAUDITED CONDENSED CONSOLIDATED INTERIM HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2018

INTRODUCTION

The board of directors ("the Board") of the Company is pleased to present the results for the six months ended
31 August 2018.

RHB was incorporated on 13 December 2016 and successfully listed as a Special Purpose Acquisition Company
("SPAC") on the Johannesburg Stock Exchange ("JSE") on 12 July 2017, raising R500 000 000 through the issue
of 50 000 000 "A" ordinary shares at R10 a share.

On 26 April 2018, RHB successfully acquired viable healthcare assets as a SPAC and has subsequently applied
for its reclassification with JSE. JSE has completed the reclassification of RHB on 30 September 2018 after the
acquisition of viable assets. The company is an investment entity.

CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED
31 AUGUST 2018

                                                                      Aug-18       Aug-17         Feb-18
                                                                   Unaudited    Unaudited        Audited
                                                                           R            R              R

Administrative and other operating expenditure                   (2 140 398)    (965 912)   (12 522 732)   
Finance income                                                    15 832 157    6 606 885     20 827 263   
Fair value on investment of fair value through profit
or loss                                                           29 985 263            -              -   
Income before taxation                                            43 677 023    5 640 974      8 304 531   
Taxation                                                        (10 550 392)            -      (468 619)   
Income for period                                                 33 126 631    5 640 974      7 835 912   
Other comprehensive income                                                 -            -              -   
Total comprehensive income for the period                         33 126 631    5 640 974      7 835 912   
Earnings per share (cents)                                                                                 
Basic and diluted income per share (cents)                             65,18        40,70          24,70   
Weighted average number of shares                                 50 821 918   13 858 696     31 780 822   


Note: The company issued 1 250 000 shares in a share for share transaction in the acquisition of Africa 
Healthcare in April 2018 and there were no dilutive instruments in issue.

CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2018

                                                                      Aug-18        Aug-17        Feb-18   
                                                                   Unaudited     Unaudited       Audited   
                                                                           R             R             R   
ASSETS                                                                                                     
Non-current assets                                                                                         
Investments at fair value                                        171 285 263             -             -   
Current assets                                                                                             
Cash and cash equivalents                                        377 145 871   493 841 038   499 177 878   
Related party loans                                                1 336 283             -             -   
Account receivables                                                4 527 025             -             -   
                                                                 383 009 180   493 841 038   499 177 878   
Total assets                                                     554 294 443   493 841 038   499 177 878   
EQUITY AND LIABILITIES                                                                                     
Share capital                                                    500 326 373   487 577 373   487 826 373   
Retained income                                                   40 962 543     5 640 973     7 835 912   
Total equity                                                     541 288 917   493 218 346   495 662 285   
Other payables                                                     2 455 134       622 692     3 515 593   
Deferred tax                                                      10 550 526             -             -   
Current liabilities                                               13 005 526       622 692     3 515 593   
Total equity and liabilities                                     554 294 443   493 841 038   499 177 878   
Net asset value per share (R)                                          10,56          9,86          9,91   
Shares in issue                                                   51 250 000    50 000 000    50 000 000   


CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 AUGUST 2018

                                                                       Share     Retained          Total   
                                                                     Capital       Income         Equity   
                                                                           R            R              R   
Opening balance as at 1 March 2017                                         -            -              -   
Shares issued                                                    500 000 000            -    500 000 000   
Transactional costs                                             (12 173 627)                (12 173 627)   
Total comprehensive income for the period                                  -    7 835 912      7 835 912   
Balance at 28 February 2018                                      487 826 373    7 835 912    495 662 285   
Shares issued                                                     12 500 000            -     12 500 000   
Transactional costs                                                        -            -              -   
Total comprehensive income for the period                                  -   33 126 631     33 126 631   
Balance at 31 August 2018                                        500 326 373   40 962 543    541 288 917   


CONDENSED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 AUGUST 2018

                                                                      Aug-18        Aug-17        Feb-18   
                                                                           R             R             R   
                                                                   Unaudited     Unaudited       Audited   
Cash generated from operating activities                          43 677 023     5 640 974     8 304 531   
Income tax paid                                                    (800 000)             -     (468 619)   
Non-cash items                                                                                             
Fair value gains on investments                                 (29 985 263)             -             -   
Changes in working capital                                                                                 
Increase in receivables                                          (3 727 025)             -             -   
(Decrease)/Increase in payables                                  (1 060 459)       622 692     3 515 593   
Net cash inflow from operating activities                          8 104 276     6 263 666    11 351 505   
Cash flow from investing activities                                                                           
Acquisition of Investments in fair value through
profit or loss                                                 (128 800 000)             -             -   
Net cash outflow from investing activities                     (128 800 000)             -             -   
Cash flow from financing activities                                                                        
Related party loans                                              (1 336 283)             -             -   
Proceeds on share issue                                                    -   487 577 372   487 826 373   
Net cash inflow from financing activities                        (1 336 283)   487 577 372   487 826 373   
Net movement in cash and cash equivalents                      (122 032 008)   493 841 038   499 177 878   
Cash and cash equivalents at beginning of the
period                                                           499 177 878             1             -   
Cash and cash equivalents at the end of the
period                                                           377 145 871   493 841 039   499 177 878   


SEGMENTAL REPORTING

The Board has considered the implications of IFRS 8: Operating segments and are of the opinion that the current
operations of the Company constitute one operating segment.

NOTES TO THE ANNUAL FINANCIAL STATEMENTS

Basic and Headline earnings per share

From continuing operations

Basic earnings per share was based on profit after tax of R33 126 631 (prior year period: R5 640 974) and
weighted average number of ordinary shares of 50 821 918 (prior year period: 13 858 696).

Earnings per share                                                                      2018        2017   
Basic and diluted income per share (cents)                                             65,18       40,70   
Earnings (R)                                                                      33 126 631   5 640 974   


Headline earnings per share was based on profit after tax of R33 126 631 (prior year period: R5 640 974) and
weighted average number of ordinary shares of 50 821 918 (prior year period: 13 858 696). There was no
accounting write downs or sale of assets. All the earnings are based on capital investment activities.

Headline earnings per share                                                             2018        2017   
Headline and diluted income per share (cents)                                          65,18       40,70   
Earnings (R)                                                                      33 126 631   5 640 974   


INVESTMENTS

The Company acquired African Healthcare ("AHC"), Vryburg Private Hospital ("VPH") on 26 April 2018 and
Rondebosch Medical Centre Proprietary Limited ("RMC") on 14 May 2018. The acquisition for AHC and VPH were
both classified as Category 1 acquisitions in terms of the JSE Listings Requirements. The acquisitions 
resulted in the Company applying for a classification as an investment entity in terms of the JSE Listings 
Requirements.


Details of the Rondebosch Medical Centre acquisition:

On 14 May 2018, the Company acquired 30% of the equity in Rondebosch Medical Centre Proprietary Limited
("RMC") by way of a subscription of new RMC shares and the provision of a shareholder loan, and acquire a
call option which entitles the Company to acquire an additional 21% of the issued shares in RMC on the 4th
anniversary of the Company's initial investment. Based on independent valuation at acquisition date, the
business was valued at R34,6 million.


RELATED PARTIES

RH Managers Proprietary Limited ("RHM") and Thirdway Investments Proprietary Limited ("TWI") separately owns
30% of RH Bophelo Management Company Proprietary Limited ("RHBM"), therefore has significant influence on
the affairs and operations of RHB. Some of the directors of RHBM and RHM are also executive directors of RHB,
whilst a non-executive director of the Company is a partner in TWI.

Management fees

RH Bophelo Management Company Proprietary Limited ("RHBM") provides Management Services to RHB.
Management fees are 0,7% per quarter of the total capital raised, as long as the Company has not made investment
for over R281 million. Management fees paid to RHBM in the current period amounted to R882 192. An amount of
R214 310 was included in other payables at period end.

Professional fees

Professional fees of R900 000 were paid by the Company to Thirdway Investments Proprietary Limited. These
payments were made for corporate advisory services.

Subsidiary

RH Bophelo Operating Company Proprietary Limited, a wholly owned subsidiary of the Company. An amount of 
R1 492 261,52 (nil in the prior period) was included in other receivables at period end.

COMPARATIVE INFORMATION
The purpose of this report is to provide a half year report on the performance of the business and its 
investments. The full information for the prior financial year end will be enclosed as a comparison and the 
half year information for 2018.

BASIS OF PREPARATION

The interim results have been prepared in accordance with the framework concepts and the recognition and
measurement principles of International Financial Reporting Standards ("IFRS") and the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by
the Financial Reporting Standards Committee presented in accordance with the minimum content, including
disclosures, prescribed by IAS 34: Interim Financial Reporting applied to year-end reporting, the Companies Act
of South Africa, and the JSE Limited's Listings Requirements ("Listings Requirements").

These condensed financial results have been extracted from the interim financial statements of RHB which have
been prepared under the supervision of the Financial Director, Dion Mhlaba CA(SA). These condensed half year
financial results and any forward-looking statements in this announcement have not themselves been audited nor
reviewed by the external auditors. The Board takes full responsibility for the preparation of this report and 
ensuring that the financial information has been correctly prepared.

ACCOUNTING POLICIES

The accounting policies applied in the preparation of these interim results for the six months ended 31 August 2018
are in terms of IFRS and are consistent with those applied in the preparation of the annual financial.

FINANCIAL OVERVIEW

Financial Performance
The key financial results reflected in these inaugural interim financial results are:

RHB recorded an operating profit of R33 126 631 to date 31 August 2018 (August 2017: R5 640 974) which
comprises of finance income of R15 832 157 (prior year period: R6 606 885) and fair gains on investments held
at fair value through profit or loss for R29 985 263 (prior year period: Nil).

Basic earnings per share and headline earnings per share amounted 65,18 (prior year period: 40,70) cents
respectively. The reported net income should be viewed in the context of the following:

-   RHB listed on the JSE on 12 July 2017, and did not engage in any commercial trade prior to listing;
-   On listing, the Company issued 50 000 000 shares and raised R500 million;
-   Additional 1 250 000 shares were issued as part of the AHC transaction in May 2018 at VWAP of 
    R10 per share;
-   The reported expenses R2 140 398 for this period is therefore comprised of the permissible and
    budgeted expenses;
-   The Company had taxable income of R43 677 023;
-   RHB has acquired 60% of African Health Care ("AHC"), 81% of Vryburg Private Hospital ("VPH") and
    30% Rondebosch Medical Centre ("RMC"); and
-   The investments in AHC, VPH and RMC have resulted in the fair value gain of R29 985 263 in the
    interim period.

Before listing, the Board made it known to the market that the Company was seeking the acquisition of a viable
asset in the Healthcare industry. Since the listing, management has been diligently reviewing various potential
acquisition opportunities and is continuously engaging with potential vendors on propositions that could satisfy
the Company's vision and values. The Company has sufficient resources to make a significant investment, using
cash, equity and debt, or any combination thereof as deemed appropriate by management and the Board.

The acquisition of the viable assets were approved by shareholders on 26 April 2018 in line with JSE Listings
Requirements.

SUBSEQUENT EVENTS

There are no subsequent events.

GOING CONCERN

The Board has undertaken a detailed review of the going concern capability of the Company with reference to
certain assumptions and plans underlying various internal cash flow forecasts.

The Board has not identified any events or conditions that individually or collectively cast significant doubt on the
ability of the Company to continue as a going concern.

DIVIDENDS

No dividend has been declared during the period under review.

On behalf of the Board
Quinton Zunga
CEO

Johannesburg
16 November 2018

Registered Office                                 Transfer Secretaries                                  
3rd floor, 18 Melrose Boulevard                   Computershare Investor Services Proprietary Limited   
Melrose Arch, Melrose North                       (Registration number 2004/003647/07)                  
Johannesburg, 2076                                Rosebank Towers,                                      
South Africa                                      15 Biermann Ave, Rosebank,                            
                                                  Johannesburg, 2196                                    
Directors                                         South Africa                                          
Q Zunga (Chief executive officer)                                                                       
KD Mhlaba (Chief financial officer)                                                                     
VP Nomvalo (Executive director)                                                                         
*MP Mehlape (Non-executive Director)                                                                    
JR Oliphant (Non-executive chairman)              Sponsor                                               
Dr. PD Sekete (Non-executive Director)            Deloitte & Touche Sponsor Services Proprietary Limited      
Dr. SG Motuba (Lead independent)                  (Registration number 1996/000034/07)                                                  
Dr. KR Ntshwana (Independent)                     The Woodlands, Woodlands Drive                
L Shezi (Independent)                             Woodmead, Sandton                         
                                                  Johannesburg, 2196                                    
                                                  South Africa                                   
Company Secretary                                                                           
Corporate Vision Consulting Proprietary Limited                                                         
(Registration number 2015/006536/07)                                                                    
3 Decotah, Canart Street, Kyalami Hills                                                                 
Johannesburg, 1684                                                                                      

* reclassified as a non-executive director in the current year from chief operating officer on 31 July 2018.



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